Department of Economics Spring 2019 Brown Bag Series

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Date(s) - 02/18/2019
12:00 pm - 1:00 pm

Andrew G. Clark Building

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The Brown Bag Seminar Series offers current ECON graduate students the opportunity to present ongoing research or to workshop new ideas. The seminars are held on Mondays from 12:00-1:00pm in Clark C307 and are open to everyone.

For more information on the series or specific seminars, please contact Sarah Small at or Nina Poerbonegoro at

February 18’s presenter is ECON PhD. graduate student Melanie Wentzel-Long. The title of her presentation is: “Personal Indebtedness, Social Inequality: The Gendered and Racialized Effects of the 2008 Financial Crisis on Household Debt.”

Abstract: A growing body of work has examined how the 2008 Financial Crisis impacted the distribution of household wealth. These findings have revealed stark and worsening inequalities by race and class. Yet net worth is a unidimensional metric that does not distinguish between changes on each side of household balance sheets and the different mechanisms that they imply. Is inequality in net worth driven by slower asset accumulation for some groups, by greater household indebtedness, or both? Disentangling these questions is important for understanding the outcomes of the financial crisis. Existing evidence suggests that predatory lending in the pre-crisis period and the use of borrowing to smooth across income shocks may have fueled rising indebtedness among women and communities of color. In this paper, I use PSID data to examine gender and racial inequality in household debt, leverage, and debt-to-income ratios pre- and post-crisis. While I do not find evidence that high-cost mortgage lending before the crisis disproportionately targeted previously credit-constrained groups, consumer debt relative to income rose more post-crisis for black household heads and for women than for other groups. Leverage was also persistently higher for these groups, and the gap continued to widen post-crisis for female-headed households. These trends may be linked to general economic insecurity, lagged effects of mortgage debt, and gendered and racialized trends in student debt. Variation in household financial stability is an under-examined dimension of economic inequality that is of key policy relevance as borrowing begins to return to pre-crisis levels.